Legal & General has exchanged contracts on a £300m build-to-rent scheme in east London development hotspot Woolwich, for what will be its largest project to date in the capital.
The pension fund already has 479 homes under construction at Blackhorse Road in Walthamstow and 251 at Taberner House in Croydon, but is now planning another 650 flats on a 2.2-acre site between Beresford and Macbean Street.
The site is being bought without planning from Macbean Developments, a private company that bought the site for £11m in 2011. Macbean Developments is controlled by British businessman Steve Yat Lung Sun. The deal will be conditional on the site receiving planning.
L&G will join the host of household names that have descended on Woolwich since Berkeley first secured the Royal Arsenal site in 2000 and in anticipation of the arrival of Crossrail at the end of 2018.
Berkeley is building more than 5,000 homes at Royal Arsenal, of which more than 2,000 are complete, while nearby Meyer Bergman has 804 homes to build out of phases 3 and 4 around the Tesco site, including a 27-storey tower. St Modwen and Notting Hill have submitted plans for 742 homes at Spray Street while the nearby Island Site has planning for 310 homes.
Most recently, British Land bought into the area through the acquisition of the Woolwich Estate, which includes 360,000 sq ft of commercial space alongside 50,000 sq ft of residential space. Longer term, Greenwich Council is planning to regenerate three estates, while Peabody is planning 20,000 homes further east at Thamesmead.
L&G is buying the site through its Legal & General Capital and PGGM partnership, along with capital from LGIM Real Assets through its open-ended BTR fund.
Its BTR portfolio amounts to around 3,000 homes across nine schemes, either in planning, under construction or operational. It aims to double this to 6,000 homes by the end of 2019. It has sites in Manchester, Bristol, Bath Leeds and Brighton.
It has become one of the most active players in the rental market. Alongside this, through its retirement, social housing and housebuilding arms, L&G is intending to build 80,000 homes over the next five to 10 years.
Dan Batterton, BTR fund manager at LGIM Real Assets, said: “Macbean is another great example of Legal & General investing in a location with significant urban regeneration potential and providing large-scale sustainable rental schemes which will have a positive long-term socioeconomic impact.”
Subject to planning approval, the scheme will also deliver 21,000 sq ft of commercial space and a new public square. Affordable homes will be split between London Living Rent and Discount Market Rent.
L&G was advised by Colliers International.
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